Ofgem has approved a stopgap measure to prevent the central IT system for the gas network from being overwhelmed by an unexpected surge in meter reads.
The modification to the Uniform Network Code (UNC) will require reads from some types of meters to be loaded into an interim “staging table” before being transferred into the system.
The problem emerged after the introduction of new arrangements for allocating unidentified gas created an incentive for gas shippers to submit them more frequently.
Unidentified gas refers to any gas that flows through a local distribution zone that cannot be attributed to leakages, transporters or a supply point, for instance, due to metering errors or theft. Up until a few years ago, unidentified gas was lumped together with demand from non-daily metered supply points when attributing gas usage to customers.
But in June 2017, the central data services provider (CDSP), Xoserve, implemented a major upgrade to the IT system used to manage the operation of the gas grid, known as UK Link. Since then unidentified gas has been treated as a distinct term within the allocation formula.
The volume of unidentified gas is now calculated on a daily basis and spread across all supply points using a weighted scaling factor that varies depending on the type of customer.
The calculation incorporates estimated consumption from non-daily-metered supply points. As meter reads from these supply points are submitted over time, the allocations are adjusted accordingly, eventually revealing the true amount of gas that is missing.
The scaling factors are determined by the Allocation of Unidentified Gas Expert and are intended to reflect the extent to which each customer segment is responsible for the occurrence of unidentified gas. Supply points are divided into End User Categories (EUCs), depending on the amount of gas they consume, and settlement classes, depending on how often they are read.
The AUGE believes that the majority of the gas that remains unaccounted following final reconciliation has been stolen. It also believes there is a greater opportunity for theft from supply points in settlement class 4, which only requires the submission of annual meter reads.
The scaling factor for a typical domestic gas meter falling in EUC band 1 is therefore significantly lower if the supply point is also in settlement class 3, requiring daily readings to be submitted in monthly batches.
This has increased the uptake of class 3 meters beyond the levels forecast by Xoserve as part Project Nexus – the programme to upgrade UK Link.
As of 1 July 2019, there were around 170,000 class 3 supply points. Gas shippers have warned Xoserve this could rise to around 4.5 million as a direct result of the new scaling factors due to come into effect at the beginning of October.
The proposer, Gazprom, said this could theoretically lead to as many as 135 million meter reads being received in a single day.
UNC700 will address the problem by requiring all class 3 meter reads to initially be entered into an interim staging table. Those for supply points within EUC bands 2-9 will be then be loaded into UK Link as normal, as will at least one per week for supply points in EUC band 1.
“We consider that this proposal provides a relatively straightforward and pragmatic mitigation against the risk to the operation of the central systems that may arise from the unforeseen, though perhaps not unforeseeable, escalation in the take up of the class 3 settlement product,” Ofgem said in its decision letter.
“This will ensure that the vast majority of energy attributable to class 3 supply points is promptly reconciled, whilst allowing the CDSP to manage the volume of data entering UK Link.”
The regulator said the measure should be considered a “temporary expedience” rather than an “enduring restriction”. It noted calls by some stakeholders for a sunset provision but said it does not form part of the modification it has approved.
The modification was granted urgent status by Ofgem in July.